Pfizer earnings squeezed

But results beat expectations, despite sooner-than-expected loss of blockbuster Norvasc, weak Exubera sales.

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Pfizer's first-quarter earnings managed to beat analyst forecasts Friday despite the patent loss of the blood pressure blockbuster Norvasc and anemic sales from the new diabetes product Exubera.

Chief executive Jeffrey Kindler said, in a call with analysts, that Pfizer (down $0.10 to $26.97, Charts, Fortune 500) was hit with the "unexpected challenge" of Norvasc's patent loss in the first quarter, six months earlier than expected, as a result of a court ruling. Kindler said the company would miss out on $1.2 billion in projected sales because of the loss.

Sales for Norvasc slipped 10 percent in the first quarter to about $1 billion, but the drug held its place as the company's second-biggest seller.

Also, Kindler said the "performance remains disappointing" for Exubera, the first form of inhalable insulin for diabetics, but that he "still believes in this medicine." Many analysts hailed Exubera, which launched in 2006, as a potential blockbuster, but the product has failed to catch on. Sales are so slim that Pfizer hasn't bothered to report them.

New York-based Pfizer suffered an 18 percent drop in first-quarter net income to about $3.4 billion, or 48 cents per share. Excluding charges, the company's EPS jumped 15 percent to 68 cents, beating the 57 cents projected by analysts, according to Reuters Estimates.

Sales increased 6 percent to $12.5 billion.

Sales jumped 8 percent from the year-earlier quarter for the cholesterol-cutting drug Lipitor, the world's top-selling blockbuster, to nearly $3.4 billion despite a dip in U.S. prescriptions. An increase in price and other factors managed to offset the decline in prescription volume, the company said.

Despite the difficulties, Pfizer's stock price was down only a fraction of a percentage point in Friday trading, partly because the company has managed to impress investors and analysts with its multi-billion dollar cost-cutting effort. This includes the planned cutting of 10,000 jobs, many of them sales reps, and the closure of five manufacturing plants and five research facilities.

Barbara Ryan, analyst for Deutsche Bank who rates Pfizer a "buy," wrote in a published note that this "accelerated restructuring" and "strong financial management" would help the drive future EPS growth through 2010. But beyond that, Ryan said Pfizer needs to find a way - probably through corporate acquisitions - to fill the impending sales vacuum of Lipitor, which is scheduled for patent expiration in 2011.

Going forward, Kindler said Pfizer has "the largest pipeline in our history," with nearly 250 experimental drugs in development.

This include maraviroc, a potential anti-viral for AIDS patients. On April 24, advisers for the Food and Drug Administration are scheduled to vote on whether they believe maraviroc merits approval. This vote will be taken as advice by FDA regulators, when they decide at a later date whether to approve the drug.

Pfizer lost its position as the world's No. 1 drug company, in terms of annual sales, to Johnson & Johnson (up $0.18 to $65.12, Charts, Fortune 500), according to the Fortune 500 list. Other industry leaders include Merck (up $1.34 to $51.49, Charts, Fortune 500), Wyeth (up $0.17 to $55.83, Charts, Fortune 500), Abbott Laboratories (up $0.61 to $57.85, Charts, Fortune 500) and Bristol-Myers Squibb (up $0.25 to $28.67, Charts, Fortune 500).

Ryan does not own Pfizer stock but Deutsche Bank seeks business with the company. Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.